A 'value for money' framework to study product competitiveness in the automotive market

Assessing the value for money of a product is of paramount importance to get useful strategic information relative to market and technological trends and major determinants of technological innovation, and to conduct benchmarking studies and make comparison among competitive products. This paper note presents a methodological “value for money” framework to assess the market competitiveness of a passenger car. This framework uses both published data and industry expert judgements. In this framework, the value for money of a car is assumed to be dependent on the economic cost (i.e., price and fuel consumption) that the consumer has to bear when using it, and on the car technical value (PTV) which is built as a function of certain measurable features of the product. The framework is adopted to analyse a sample of 216 cars that were sold in the Italian domestic market between the 70s and the early 90s. The relationship between the car technical value, price, and fuel consumption is investigated using a translog regression equation.